Powell has spoken. In the end, the Fed was more dovish than expected. As expected, the official rates on Fed funds were raised to 0.75% -1%, from 0.25-0.50% (+50 bp): the first half-point hike since May 2000 under Alan Greespan. In the meantime, the securities portfolio will be reduced starting from 1 June at an initial rate of 47.5 billion per month, which will then rise to 95 billion. Total Fed assets currently stand at $8,939 billion, which means that this is even less aggressive than expected. Powell also ruled out a possible triple hike at the June meeting. The stock also celebrated the above-expected quarterly results with revenues of $5.9 billion, up 11% vs consensus. Also reported was an EBITDA of $1.96 billion, which exceeds estimates by 24%. Profit at $1.6 billion beats analysts’ estimates by 26%.
AMD [AMD.O] is down 1% to $98.4 in pre-trading. Yesterday, it closed at $99.42 (+9.1%). Graphically, after a sharp decline started on the highs of November 2021 at $164, it seems to have recovered strength. The publication of the results and Powell’s indications have given a strong boost to the stock that seeks a restart after having fouled the $90 level. A break of $100 at the end would give an important signal of strength also since the session of May 4th closed with very strong volumes, strong volatility and RSI with a bullish approach. Above $100, you can buy with a target of $110 and then $120.
We recommend going LONG on the stock by buying the Leverage Shares AMD 3X ETP (ISIN: XS2337090422) or the 2X ETP (ISIN: IE00BKT6ZG93), with an increase in exposure on any declines to $95. Short-term targets should be towards $110 and $120 and stop/loss should be below $90.
